The authors thank Thijs van Rens, Mike Grossman, Giovanni Peri, Mark Partridge, and two anonymous referees for detailed comments on this paper. We have also benefited from comments at seminars at Universitat Pompeu Fabra, Queens College CUNY, Universitat de Barcelona, the University of Connecticut, The CUNY Graduate Center, and the Society of Labor Economics. Gonzalez acknowledges the financial support of the Spanish government grant SEJ2007-64340/ECON.

Abstract

ABSTRACT We provide causal estimates of the effect of immigration on house prices and construction activity in Spain over the period 2000–2010. During this period Spain experienced spectacular swings in both immigration and the housing market. Our instrumental-variables estimates suggest that between 2000 and 2010, immigration led to an average 1.5 percent annual increase in the working-age population. This was responsible for an annual increase in housing prices of about 2 percent, and for a 1.2–1.5 percent increase in housing units. Overall, immigration was responsible for one quarter of the increase in prices and about half of the construction activity over the decade.

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11Maria Teresa Balaguer-Coll, María Isabel Brun-Martos, Anabel Forte, Emili Tortosa-Ausina, Local governments' re-election and its determinants: New evidence based on a Bayesian approach, European Journal of Political Economy, 2015, 39, 94CrossRef